Spain’s Bankia sells €800-million failed loan portfolio

MADRID | BFA-Bankia Group said Tuesday it had closed ‘Operation Hispania’, disposing of a large portfolio of failed loans. The deal involves a total of €800 million.

The Spanish troubled bank, which is in need of a multi-billion public capital to maintain its activity, sold the loans to two north European investment funds. They are Aktiv Kapital in Norway and Oko Investments in Luxembourg.

The operation has been structured in two sub-portfolios: individual consumer loans, which have been purchased by Aktiv Kapital, and loans to small and medium enterprises (SMEs), acquired by Oko Investments, according to Bankia.

“The disinvestment will have a positive impact in the bank’s income statement as the loans were already written off in full. The portfolio consists of approximately 127,000 loans, with an average age of five years. Around 80% were to individual customers.”

The auction procedure began in March with the participation of leading international investment funds and financial entities specialised in this business sector. Despite the adverse situation and special circumstances faced by the market, the operation was culminated in a very short time frame.

Bankia explained that the operation is part of the bank’s plan to dispose of non-strategic assets. The 3-year target is to reduce non-productive assets by half, down to €30 billion, as was announced by group chairman José Ignacio Goirigolzarri at the general shareholders’ meeting.